The issuance of a demand notice for seigniorage fee without proper consideration of the petitioners' explanations constitutes a violation of natural justice, necessitating remand for further evaluation.

ORDER :

K. LAKSHMAN, J.

Heard Mr. S. Ravi, learned Senior Counsel representing M/s. R.S. Associates, learned counsel for the petitioners, learned Government Pleader for Mines and Geology appearing on behalf of respondent Nos.1 to 3 and Mr. V. Narasimha Goud, learned Standing Counsel for HMDA appearing on behalf of respondent No.4.

2. CASE OF THE PETITIONERS

i) Petitioner No.2 is the absolute owner and possessor of the land admeasuring Acs.4.07 guntas in Survey No.88/AA of Kokapet Village, Gandipet Mandal, Rangareddy District, which is hereinafter referred to as ‘subject property’.

ii) He has entered into a registered Development Agreement- cum-General Power of Attorney (for short ‘DAGPA’) bearing document No.2659 of 2018, dated 21.03.2018 with petitioner No.1 for development of Commercial Building over the subject property. The construction was going on.

iii) Respondent No.3 has issued a show-cause notice dated 12.03.2024 in the name of M/s. GAR Corporation Private Limited stating that the said Company excavated and transported 1,41,120 Metric Tons (MT) of Gravel and 60,480 MT of Rough Stone unauthorizedly. Fifteen (15) days time was granted to submit explanation as to why seigniorage fee along with ten (10) times penalty should not be imposed.

iv) According to the petitioners, respondent No.3 had issued the said show-cause notice in the name of M/s. GAR Corporation Private Limited. In fact, the said Company is nothing to do with the construction. However, petitioner No.1 - M/s. Gavva AR Real LLP, is the sister concern of the aforesaid Corporation. Therefore, petitioner No.1 had submitted a detailed reply dated 27.03.2024 contending that the petitioners have already made payments towards Environment Impact Fee @ Rs.3/- per square feet of built up area, to respondent No.4 in terms of G.O.Ms.No.34, dated 17.06.2015 and G.O.Ms.No.8, dated 24.02.2016.

v) Without considering the same, respondent No.3 has issued the impugned demand notice dated 18.04.2024 demanding an amount of Rs.67,53,600/- (Rupees Sixty Seven Lakhs Fifty Three Thousand and Six Hundred) towards normal seigniorage fee and ten (10) times of penalty. Challenging the said notice, the petitioners filed the present writ petition contending as follows:

(a) There is no consideration of the explanation dated 27.03.2024 submitted by petitioner No.1 to the show-cause notice dated 12.03.2024.

(b)Though petitioner No.1 specifically mentioned the details of payment including challan number, date and amount in the explanation, the same were not considered by respondent No.3.

(c) The alleged site inspection by the Technical Staff of respondent No.3 is behind back of the petitioner.

(d)Respondent No.3 has not furnished copy of the Inspection Report to the petitioners herein.

(e)Entire action is in violation of the TELANGANA STATE MINOR MINERAL CONCESSION RULES , 1996 (for short ‘TSMMC Rules’), more particularly, Rule - 26. As per the said Rules, only Nominated Officer has to conduct inspection.

(f) In the show-cause notice dated 12.03.2024, there is mention about the inspection conducted by the Technical Staff.

(g)The principal activity of petitioner No.1 is to execute civil works and incidentally if any minor mineral was unearthed during the course of construction, it was re-used in site and not transported anywhere outside the site for any commercial purpose. The said aspects were specifically mentioned in the reply submitted by petitioner No.1. The same was not considered by respondent No.3 in the impugned demand notice.

(h)The petitioners also placed reliance on the principle laid down by the High Court of Andhra Pradesh in